Labour falls under the Concurrent List in Schedule 7 of the Indian Constitution, granting both the Central and State governments the power to legislate on related matters such as trade unions, labour disputes, welfare, and workplace safety. In 2024, India witnessed 700+ updates in labour compliance regulation.
These policy updates reflect a strong commitment by the government to improve employee welfare, streamline compliance, and foster equitable work environments. From interest calculation reforms under the EPF scheme to simplified penalty structures for delayed contributions, and from inclusive pension reforms to the launch of dedicated grievance redressal mechanisms, the year marked several critical shifts.
Changes in EPFO Interest Calculations: A November 30, 2024, EPFO press release revised interest calculations for claims settled between the 25th and the end of each month. Under the previous rule, interest on EPF balances was paid only up to the end of the month preceding the settlement date. This meant that if a claim was settled till the 24th of the month, interest would only be paid until the end of the previous month, causing members to lose interest for the days between the start of the current month and the date of settlement. With this amendment to paragraph 60(2)(b) of the EPF Scheme, 1952, members will receive interest up to the actual settlement date. This will benefit members by providing them more interest and ensuring no interest is lost because of the settlement dates.
Simplification of penalties for delayed contributions of EPF, EPS, and EDLI: The Ministry of Labour and Employment amended the Employees’ Provident Funds Scheme, 1952, to revise the damages imposed on employers for delayed contributions. Effective 14th Jun 2024, employers were charged a 1% penalty on the arrear of contributions for each month or part thereof that payment is delayed. Previously, the penalty rate varied based on the duration of the delay.
Employees’ Pension (Amendment) Scheme: The Ministry of Labour and Employment has introduced key updates through the Employees’ Pension (Amendment) Scheme, 2024, and the Second Amendment, bringing new actuarial factors for early retirement (before age 42) and revising the pension payout structure. The updated Table D outlines the proportion of wages to be returned to employees based on service length, promoting transparency and fairness.
Equal Opportunity Policy for Transgender Persons: New guidelines mandate employers to adopt equal opportunity policies for transgender individuals. The primary objective of this comprehensive policy is to create an atmosphere that ensures the fair treatment of transgender individuals, free from discrimination, harassment, and bias, while establishing a robust grievance redressal mechanism.
EPFO Amnesty Scheme - The EPFO Amnesty Scheme 2024 is a notable initiative introduced by the Employees' Provident Fund Organisation (EPFO) to assist employers in settling their outstanding Provident Fund (PF) contributions. The scheme assists employers by offering advantages and concessions for any outstanding or late contributions. The focus of this scheme is to offer an opportunity to employers who have defaulted on EPF contributions to settle their dues with some relief.
